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When the two dominant U.S. sports-betting companies hosted second-quarter earnings calls on Thursday (August 7), their bosses reassured analysts they were closely monitoring developments with the prediction markets but would remain on the sidelines for now.

“We’re evaluating,” DraftKings CEO Jason Robins said. “Obviously, we have a lot of stakeholders, state regulators, relationships with tribes, and others that we want to make sure we consider as we think about what our different options are.”

Robins said DraftKings remains in “monitor mode” instead of entering any active discussions.

In its earnings report, DraftKings maintained its fiscal year 2025 revenue guidance of $6.21bn to $6.4bn in revenue but did not include the potential launch of a prediction-market offering in that guidance.

Both DraftKings and FanDuel have previously expressed cautious interest in entering the prediction markets space since Kalshi and Crypto.com began offering sports-event contracts several months ago. 

According to published reports, DraftKings has been in talks to acquire Railbird Exchange, while FanDuel has reportedly had discussions with Kalshi about some kind of partnership agreement.

“The events contracts landscape continues to develop at pace,” said Peter Jackson, CEO of Flutter Entertainment, parent company of FanDuel. “We are evaluating the various regulatory developments and assessing the potential opportunities this may present to FanDuel.”

Jackson declined to speculate on the different ways in which FanDuel would assess this opportunity and “what the potential costs and different opportunities are.” 

Still, he again reminded analysts that Flutter operates the world’s largest betting exchange, Betfair, which shares similar characteristics of the event contracts.

That “will obviously be helpful to us as we consider the landscape in any developments,” Jackson added.

Flutter Addresses Reported Kalshi Talks

Erica Okerberg, an attorney at Greenberg Traurig and Nevada counsel for Flutter, on Wednesday confirmed reports of talks with Kalshi but said the company has not entered into any agreement.

“They continue, like other gaming operators, to monitor the space,” Okerberg told the Nevada Gaming Control Board (NGCB) during a meeting. “If there were any change in that position, we would of course speak with the gaming control board about that.”

Board member George Assad had raised the issue of FanDuel’s reported interest in doing business with Kalshi. He reminded Okerberg and Mark Irwin, group director of finance at Flutter, that Nevada’s position is that Kalshi is operating in the state illegally because Kalshi does not have a state gaming license to offer sports betting.

Nevada, New Jersey, and Maryland are all involved in active litigation seeking to block Kalshi from offering sports-event contracts within their states, while gaming regulators in Arizona, Illinois, and Ohio have also issued cease-and-desist orders to the company.

Last week, a Maryland federal court judge denied Kalshi’s request for an injunction barring state regulators from taking enforcement action against the company.

The Maryland Lottery and Gaming Commission told Kalshi it would not pursue enforcement actions until after a status conference scheduled for Wednesday (August 13) on Kalshi’s appeal.

In an ongoing legal battle, Kalshi and other operators have taken the position that federal regulation of prediction markets preempt those on the state level, a position state gaming regulators disagree with.

“I think we will prevail in our case,” said the NGCB's Assad, who added that the issue of federal or state regulation of sports-event contracts will ultimately end up before the U.S. Supreme Court.

Assad said claims the Commodity Futures Trading Commission (CFTC) has jurisdiction over state sovereignty is “an issue that is in litigation.” Assad said the Commodity Exchange Act (CEA) lists numerous examples of what is a commodity, including “rice, corn, wheat, silver, gold, platinum, and pork futures.”

“It is not whether Duke is going to win the NCAA (men’s basketball) tournament. That is not a commodity,” Assad told Irwin and Okerberg.

Legacy Gaming Brands Eye Prediction Markets

Two of the largest land-based casino operators in the U.S. are also keeping tabs on how the legal battle between prediction market operators and state gaming regulators plays out over the next few months.

Neither MGM Resorts International, which has a 50-50 stake in its mobile gaming business BetMGM with Entain, nor Caesars Entertainment have announced any plans to begin offering sports-event contracts. But both companies believe prediction markets could be another way to boost their digital businesses.

“We’re actively watching the situation,” Caesars CFO Eric Hession told analysts during a quarterly conference call on July 29. “And we’ll make sure that we are not caught flat-footed on that.”

Hession said nothing has really changed since earlier this year, except a lot more people are objecting to it.

BetMGM CEO Adam Greenblatt said his company was “monitoring very closely” prediction markets, but was not currently planning to be a “first-mover” in offering sports-event contracts.

“Very closely means daily, including all the court proceedings (and) including the new entrants returning to the U.S.,” Greenblatt told analysts during a second quarter earnings call on July 29.

One such new entrant is Polymarket, which is poised to legally return to the U.S. after acquiring derivatives exchange QCX for $112m. QCX comes with a license from the CFTC, allowing it to legally provide markets in the U.S.

“Our state regulators have been very clear,” Greenblatt said. “Our tribal partners have been very clear. Thirty-four state attorneys general have been very clear. They don’t believe prediction markets should offer sports contracts because that is sports betting.”

On Thursday, PENN Entertainment CEO Jay Snowden also told analysts during a second-quarter earnings call the operator of ESPN Bet would consider a move into prediction markets if the right opportunity presents itself but was monitoring the current litigation in federal court before considering the next steps.